SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
QUARTERLY REPORT PURSUANT TO SECTION 13
[X] OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1994
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OR
TRANSITION REPORT PURSUANT TO SECTION 13
[ ] OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
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Commission file number 1-9278
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CARLISLE COMPANIES INCORPORATED
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(Exact name of registrant as specified in its charter)
Delaware 31-1168055
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(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
250 South Clinton Street, Suite 201, Syracuse, New York 13202
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(Address of principal executive offices) (Zip code)
315-474-2500
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(Registrant's telephone number, including area code)
Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
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Shares of common stock outstanding at November 1, 1994 15,272,895
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Page 1 of 9
PART I. FINANCIAL INFORMATION
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
Statements of Consolidated Earnings
Three Months and Nine Months ended September 30, 1994 and 1993
(Dollars in thousands except per share amounts)
THREE MONTHS ENDED NINE MONTHS ENDED
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SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30,
1994 1993 1994 1993
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Net Sales $ 184,131 $ 160,615 $ 522,618 $ 459,820
Cost and expenses:
Cost of goods sold 136,341 118,992 388,115 341,070
Selling & administrative expenses 26,669 25,399 78,420 73,921
Research & development expenses 3,096 2,655 9,102 8,037
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166,106 147,046 475,637 423,028
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Operating profit 18,025 13,569 46,981 36,792
Other income (deductions):
Investment income 788 848 2,316 2,378
Interest expense (1,173) (968) (3,378) (3,330)
Other, net (693) (125) (1,098) (394)
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(1,078) (245) (2,160) (1,346)
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Earnings before income taxes 16,947 13,324 44,821 35,446
Income taxes 6,712 5,263 17,723 14,001
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Net earnings $ 10,235 $ 8,061 $ 27,098 $ 21,445
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Average common shares outstanding 15,477 15,529 15,498 15,477
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Net earnings per share $ .66 $ .52 $ 1.75 $ 1.39
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Dividends declared & paid per share $ .20 $ .18 $ .55 $ .52
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See accompanying notes to interim financial statements.
Page 2 of 9
CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
September 30, 1994 and December 31, 1993
(Dollars in thousands except share amounts)
SEPT. 30, DECEMBER 31,
1994 1993
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ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 57,562 $ 51,802
Receivables, less allowances of $4,540 in 1994
and $3,906 in 1993 128,862 91,158
Inventories 70,208 64,976
Prepaid income taxes and expenses 24,210 28,743
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TOTAL CURRENT ASSETS 280,842 236,679
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PROPERTY, PLANT AND EQUIPMENT 333,979 318,794
Less accumulated depreciation 183,222 176,565
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NET PROPERTY,PLANT AND EQUIPMENT 150,757 142,229
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OTHER ASSETS
Patents and other intangibles 14,059 15,831
Investments and advances to affiliates 13,734 14,780
Receivables and other assets 6,107 7,889
Deferred income taxes 5,889 2,955
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TOTAL OTHER ASSETS 39,789 41,455
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$471,388 $420,363
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 40,417 28,681
Accrued expenses 72,636 63,524
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TOTAL CURRENT LIABILITIES 113,053 92,205
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LONG-TERM LIABILITIES
Long-term debt 67,498 59,548
Product warranties 50,624 46,803
Deferred compensation and other liabilities 1,887 1,284
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TOTAL LONG-TERM LIABILITIES 120,009 107,635
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STOCKHOLDERS' EQUITY:
Common stock, $1 par value. Authorized
25,000,000 shares; issued 19,665,312 shares 19,665 19,665
Additional paid-in capital 1,235 132
Retained earnings 277,503 258,956
Cost of shares in treasury (1994 - 4,380,913
shares; 1993 - 4,412,188 shares) (60,077) (58,230)
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TOTAL STOCKHOLDERS' EQUITY 238,326 220,523
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$471,388 $420,363
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See accompanying notes to interim financial statements.
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CARLISLE COMPANIES INCORPORATED AND SUBSIDIARIES
Condensed Statements of Consolidated Cash Flows
Nine Months ended September 30, 1994 and 1993
(Dollars in thousands)
1994 1993
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OPERATING ACTIVITIES
Net earnings $ 27,098 $21,445
Reconciliation of net earnings to cash flows:
Depreciation 14,509 13,871
Amortization 1,955 1,783
Loss on sale of property, equipment & business 112 --
Changes in assets and liabilities excluding
effects of acquisitions and sale of business:
Current & long-term receivables (29,163) (32,097)
Inventories (3,704) (940)
Accounts payable & accrued expenses 18,326 19,866
Prepaid, deferred & current income taxes 1,596 (2,850)
Long-term liabilities 4,425 (3,262)
Other 528 (966)
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35,682 16,850
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INVESTING ACTIVITIES
Capital expenditures (24,156) (20,167)
Acquisitions, net of cash (7,045) (13,625)
Sales of property & equipment 3,152 --
Other 1,046 458
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(27,003) (33,334)
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FINANCING ACTIVITIES
Proceeds from long-term debt 8,000 --
Reduction of long-term debt (50) (12,050)
Dividends (8,551) (7,959)
Purchase of treasury shares (2,318) (1,845)
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(2,919) (21,854)
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CHANGE IN CASH AND CASH EQUIVALENTS 5,760 (38,338)
CASH AND CASH EQUIVALENTS
Beginning of period 51,802 90,605
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End of period $57,562 $52,267
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See accompanying notes to interim financial statements.
Page 4 of 9
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Nine Months Ended September 30, 1994 and 1993
(1) The accompanying unaudited condensed consolidated financial statements
include the accounts of Carlisle Companies Incorporated and its wholly-
owned subsidiaries (together, the "Company"). Intercompany transactions
and balances have been eliminated in consolidation. The unaudited
condensed consolidated financial statements have been prepared in
accordance with Article 10-01 of Regulation S-X of the Securities and
Exchange Commission and, as such, do not include all information required
by generally accepted accounting principles. However, in the opinion of
the Company, these financial statements contain all adjustments,
consisting of only normal recurring adjustments, necessary to present
fairly the financial position as of September 30, 1994 and December 31,
1993, the results of its operations for the three months and the nine
months ended September 30, 1994 and 1993, and its cash flows for the nine
months ended September 30, 1994 and 1993.
While the Company believes that the disclosures presented are adequate to
make the information not misleading, it is suggested that these financial
statements be read in conjunction with the financial statements and notes
included in the Company's 1993 Annual Report to Stockholders.
(2) The components of inventories are as follows:
SEPT. 30, DECEMBER 31,
1994 (000s) 1993
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First-in, first-out (FIFO) costs:
Finished goods $46,548 $43,714
Work in process 8,981 8,761
Raw materials 29,031 27,212
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84,560 79,687
Excess of FIFO cost over Last-in,
First-out (LIFO) inventory value (14,352) (14,711)
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LIFO inventory value $70,208 $64,976
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(3) Net earnings per share of common stock are based on the weighted average
number of shares outstanding of 15,477,111 for the three months ended
September 30, 1994 and 15,498,464 for the nine months ended September 30,
1994 assuming the exercise of dilutive stock options.
Page 5 of 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Carlisle Companies Incorporated's third quarter results established new
record marks for sales and earnings achieved in any one quarter in the
company's history. Continuing to build on a record year in both sales and
earnings, Carlisle reported sales of $184.1 million and net earnings of
$10.2 million, or $0.66 a share, in the third quarter of 1994. Third
quarter sales improved 15% over 1993's sales of $160.6 million, while net
earnings improved 27% over 1993's earnings of $8.1 million, or $0.52 a
share. Continued record performance from operations within the construction
materials and general industry segments and strong rebound performances from
the transportation products operations accounted for the excellent third
quarter results. For the second consecutive quarter the company's ratio of
selling and administrative expenses to sales was held below 15%.
For the nine months ended September 30, 1994, sales totalled $522.6 million,
a 14% increase over 1993's sales of $459.8 million. Net earnings through
September 30, 1994 were $27.1 million, or $1.75 a share, a 26% improvement
over 1993's earnings of $21.4 million, or $1.39 a share. The modest
economic recovery evident within the construction and transportation markets
continued through the third quarter of 1994. This stronger market demand
combined with continued increased market penetration and expanded product
offerings provided the drive for Carlisle's strong revenue performance.
Successful cost reduction programs and lower supporting expense levels in 1994
have additionally contributed to the record earnings performance.
Construction Materials segment sales rose to record levels in the third quarter
of 1994 totalling $89.4 million, a 19% increase over 1993 quarterly sales of
$74.9 million. The stronger construction market in 1994 and increased private
label sales of company products led to the strong third quarter sales
performance. Year-to-date sales now total $213.1 million in 1994, compared to
$182.3 million in 1993, an increase of 17%. Earnings for the segment increased
a strong 34% in the third quarter of 1994 compared to 1993. For the first nine
months of 1994 earnings have improved an exceptional 43% over 1993. The higher
levels of production required to meet the sales increase have resulted in
improved manufacturing expense absorption in 1994. Administrative expenses
continue to be well controlled. Price increases have been implemented to pass
through some higher material costs.
Transportation Products segment sales were 17% higher in the third quarter of
1994 totalling $47.7 million, compared to $40.9 million in 1993. For the nine
months ended September 30, 1994 sales were $152.7 million, a 14% increase over
1993's sales of $133.6 million. Earnings from operations in this segment
continued to improve in 1994, up 31% for the quarter, and 18% on a year-to-date
basis, when compared to a year ago. The earnings improvement has been achieved
despite the absorption of start-up expenses associated with the company's
container manufacturing operation, which will be fully operational in 1995.
The company's custom rubber and plastics operations have benefitted from the
recovery in the domestic automotive market in 1994. This market recovery has
been combined with aggressive marketing and product development programs to
produce record sales from these operations in 1994. Heavy-duty friction
product sales to truck and trailer manufacturers continue to outpace the prior
year, as the market remains strong. Solid improvements in industrial friction
and braking systems sales have also contributed to the sales growth seen in
1994. Operational margins have improved as manufacturing and administrative
expense levels have declined across friction and braking operations, resulting
in much improved returns. The benefits of Carlisle's increased product
development expenditures over the last two years are now being realized, as a
Page 6 of 9
range of new products, with time consuming OEM approvals completed, are now
entering the market.
General Industry segment sales totalled $47.0 million in the third quarter
of 1994 compared to $44.8 million in 1993. Quarterly earnings from
operations within this segment improved 25% in 1994 over 1993. The
quarterly sales comparisons are marginally impacted by the company's sale of
its DSI subsidiary, a producer of migrating systems, to a third party in the
third quarter of 1994. On a year-to-date basis, segment sales have improved
9% to $156.8 million when compared to 1993 sales of $143.9 million.
Earnings have improved 13% in the first nine months of 1994 compared to a
year ago. Specialty tires and wheels operations continued to set new
quarterly records in sales and earnings. Demand from original equipment
manufacturers in the lawn and garden, golf car and trailer tire markets
continues to be strong. For the quarter, specialty tires and wheels sales
improved 20%, providing an earnings improvement of over 30%. The sales to OEM
markets continue to squeeze gross margin levels, but effective expense controls
and higher sales volumes resulted in a record earnings performance.
Foodservice plastics operations also recorded increased sales in the third
quarter compared to a year ago. The success in the expansion of international
activity is encouraging. As the result of more efficient production processes
and lower expense ratios, foodservice plastics operations earnings improved by
over 35% in the quarter compared to 1993. Segment earnings also continue to be
effected by expenses incurred for the development of storage management
software and ceramic tape technology. This is not anticipated to detract from
earnings going forward into 1995.
Working Capital was $167.8 million at September 30, 1994, compared to $157.8
million at June 30, 1994 and $149.5 million a year ago. Long term debt
increased $8.0 million in the quarter as the company secured low rate
industrial development bonds to finance equipment purchases for its container
manufacturing operations. Debt, net of cash, is $9.9 million at September 30,
1994, equal to 3% of Carlisle's total long term capital.
There are no trends, demands, commitments, events or uncertainties that will
result in or that are reasonably likely to result in the company's liquidity
increasing or decreasing in any material way nor are there any known material
trends, favorable or unfavorable in the company's capital resources.
On October 3, 1994 the company announced the acquisition of the coatings and
waterproofing business of Quaker Construction Products, Inc. Now part of
Carlisle Coatings and Waterproofing Incorporated, this acquisition adds to an
extensive line of diverse coatings and waterproofing products tailored to
applications in the commercial construction market.
We are optimistic regarding the remainder of 1994, and calendar 1995 also looks
quite promising. Each of our major businesses have excellent market share with
attractive growth opportunities, internationally and domestically. Carlisle
has the resources, the opportunities and the commitment to continue its
profitable growth.
Page 7 of 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: 4. No Exhibits are included for the quarter which this
report on Form 10-Q is filed.
(b) Report on Form 8-K: No reports on form 8-K were filed during the quarter
for which this report on Form 10-Q is filed.
Page 8 of 9
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Carlisle Companies Incorporated
Date November 7, 1994 By /s/Dennis J. Hall
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Dennis J.Hall
Executive Vice President,
Treasurer, and Chief
Financial Officer
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